What is a Conservatorship?
Conservatorship is a legal arrangement where the probate court appoints a person to look after the financial and/or daily affairs of another person. The person under conservatorship is known as a “Conservatee”.
Conservatorship is somewhat similar to Guardianship the difference is that a guardian takes care of the personal needs of a person while a conservator takes care of the financial needs.
Conservatorship is also known as “Adult guardianship” in some states.
There might be several reasons why a court appoints a conservator. For example, if a person is suffering from any of the following;
- Dementia or Alzheimer's disease
- Coma
- Stoke
- Brain injury
- Any other mental or physical disability(newly developed or lifelong)
Conservators are of 2 types:
- Conservator of the estate (a person appointed by the court to take care of the financial matters of another person)
- Conservator of the person (a person appointed by the court to take care of the financial matters of another person)
Conservators are supervised and accountable to the court by which they are appointed.
Pros of establishing a Conservatorship
- Court-supervised process - The court supervises the conservators during the discharge of their duties during conservatorship. This provides protection to the conservators accountable to the court for their decisions.
- Protection against breaches of fiduciary duty or mismanagement of funds - Conservatorship prohibits the mismanagement of funds of the conservatee. A conservator is required to present all the transactions related to the conservatee’s assets to the court.
Cons of establishing a Conservatorship
- Costly - Cost can be significant. After the conservatorship is established, the court remains involved in proceedings, and the appointment of a Lawyer is also required.
- Conservatorship proceedings are public - Since all court proceedings and their documents are a matter of public record, the conservatorship proceedings also become public.
- Takes away the conservatee’s autonomy - Conservatees do not have the right to make their own decisions. This can be humiliating.
How to Avoid Conservatorship?
The best way to avoid a conservatorship is by creating a double power of attorney or a Living Trust. In case of a double power of attorney, the person named in the document will take care of the financial and health-related decisions.
If you are creating a revocable trust, you can avoid conservatorship and your successor trustee will be the person handling and managing everything in your trust on your behalf.
Conservatorship vs Guardianship
Not every person is mentally or physically capable to make sound decisions in their life. Conservatorship and Guardianship are the tools that are used to protect the well-being of a disabled adult or a minor child. Both are court-supervised processes and the person appointed is accountable to the court.
Guardianship - Parents are the natural guardian of a minor. However, the last surviving parent can appoint a guardian in their last will for their minors, known as a “Testamentary Guardian”. A testamentary Guardian is a person who has the same powers and responsibilities as you have concerning all the basic needs of your child. This includes food, shelter, education, and medical care. Guardianship of a minor terminates when the minor attains the age of 18 years.
In the absence of a Guardianship clause in your will, the courts can also appoint a guardian for your minors.
Conservatorship - When a person is incapacitated due to any mental or physical disability, a person is appointed by the court to look after his/her financial or daily affairs. For example, paying bills, collecting debts, and managing cash flow in and out of his or her estate.
The person so appointed by the court is known as the “Conservator”. A conservator is usually appointed when a person dies without a Durable Power of Attorney or a Living Trust.
